Lingerie brand Nudea’s co-founder and CEO, Priya Downes, tells Drapers she is lucky that the six-month-old brand is digital first, but finds it “tough to see the light” about future funding possibilities.
We were just getting started and an event like this is unfortunately timed in our journey. Nudea launched online in October 2019 and we were just at the stage of building brand awareness.
We’re quite lucky as we’re positioned to be digital first, but the pandemic is going to cull a lot of new brands that were reliant on physical presence. If your business model wasn’t online, it’s going to be difficult for you to survive.
The only way you can do it is by cutting expenditures, which we’ve scrambled to do in the last few weeks.
We were lean to begin with, and relied mostly on freelancers, but it’s a tough conversation to have with them. Cutting down hours isn’t something we want to do.
We bought our fulfilment in house before the coronavirus reached the UK. It was a decision that had the unintended benefit of allowing us to continue to fulfil orders at a time where large-scale distribution centres have to close. As a small business we can operate this safely with one person, which ensures minimal contact. We also hadn’t committed to heavy stock orders, but I can imagine that other start-ups might have, and have staff to keep on payroll. It’s expensive – especially if you don’t know where your funding is going to come from.
And at our stage, funding is everything. You need money to grow, and cutting expenditures at a time when we’re trying to ramp up isn’t what we wanted to be doing. It’s difficult to keep up morale. Our next round of funding is up in the air at the moment, and we’re worried about where money is going to come from in the future.
I’m hoping that we can weather the storm and come out with strong sales potential, but the funding environment is questionable and probably will be for the next year.
Emotionally, it’s quite tough to see the light from that perspective. We can be optimistic about sales but funding is the hardest part that we don’t have the answer to. We’re hoping that the investment climate has a longer-term view and that there’s still a bit of money to set aside for start-ups after 12 to 18 months.
Though we’re digital first, our sales strategy was to build awareness offline because, as a bra brand, you want to win people’s trust, and having a physical presence really helps with that. One of our big things was “fittings and fizz” parties. People would get together in an intimate environment like someone’s home, or a hotel room. It would help to build a community and awareness would spread by word of mouth.
At the end of February, 40% of our sales would come from these fit parties, and they were more successful than some social media marketing, especially Facebook. It screens lingerie ads, and it’s also crowded: a lot of people are numb to it.
We work with around 20 brand ambassadors who are social influencers. A lot of “mummy bloggers” have agreed to run the fit parties virtually. We weren’t investing in that before Covid-19, but we’re bringing it online now.
And with challenges comes opportunity. We’re thinking about fast tracking loungewear pieces, which is something we had in the pipeline and had already identified suppliers to produce this for us. It would be wrong to say we can get it in time to make the most of the period of lockdown, but I think there will be a semi-permanent step change with people working from home more often. Even if we bring in loungewear in six months’ time, it will still be relevant.
But as a brand, we are happy to pause for a few weeks while we strategise and formulate our next steps, because we recognise that there are more pressing manufacturing needs at this very moment.
Our sourcing manager also works with companies that provide personal protective equipment (PPE). There has been an opportunistic price hike from some bra manufacturers in China and Sri Lanka, who are taking advantage of the need to supply masks, PPE and hospital scrubs. Our sourcing manager is helping to find manufacturers to fill demand, but the biggest challenge is getting them at a decent margin. You would expect it to be more expensive, as it’s being produced quicker and there’s a lot of demand for it, but it’s not right to be buying protective gear at 10 times the usual price.
In terms of our own product, we were worried that people wouldn’t shift to shopping online, but they are. Women will always need bras. Our online sales are up 80% for March and we’re seeing that the average time spent on our website has risen by 5%. Page duration is up by 3%-4%, and bounce rates down – all of these are positive signs.
The next few weeks and possibly months will provide us with us so many unknown challenges, and the landscape of retail will no doubt undergo some temporary and also permanent change. In the very short term, sales and sale growth will slow down as people come to terms with the new “norm”, but we feel strongly that as an online-first brand, we have a good opportunity to embrace the new landscape.